Australia’s housing market is heating up again—but this time, the spark might come from politics. With a federal election approaching, both Labour and the Coalition are rolling out housing policies aimed at helping more Australians onto the property ladder. From shared equity programs to tapping into superannuation for deposits, the proposals promise to ease access for first-home buyers. But behind the good intentions lies a simple truth: when more people can buy and supply remains tight, prices are likely to rise fast.
What’s Driving the Push?
Labour’s Equity and Deposit Support
Labour is putting forward a mix of measures designed to improve housing access. One key proposal is the expansion of the shared equity scheme, which allows the government to take partial ownership of a property to lower the upfront cost for buyers. Alongside this, they plan to support first-home buyers with just a 5% deposit—offering to guarantee a portion of the loan and remove the need for lenders mortgage insurance. The plan also includes a $10 billion investment into affordable and social housing, plus increased rent assistance to help ease rental stress.
The Coalition’s Super Access and Tax Offsets
The Coalition’s approach focuses on unlocking private resources and reducing tax pressure. They propose allowing first-home buyers to withdraw up to $50,000 from their super to use as a deposit. On top of that, they want to make interest on the first $650,000 of a mortgage tax-deductible for five years, helping buyers reduce their overall loan costs. There’s also talk of pushing councils to speed up planning approvals by offering federal incentives—a move aimed at tackling supply delays.
Why These Policies Could Push Prices Up
More Buyers, Same Supply
The policies on both sides aim to help buyers enter the market by unlocking access to more funds—whether through equity schemes, superannuation withdrawals or tax offsets. But there’s little being done to speed up the supply side. Developers still face delays due to labour shortages, limited tradespeople, rising material costs and lengthy council approvals. So while more people may be able to bid on properties, there simply aren’t enough homes being built to meet that demand.
Investor Gains and First-Home Buyer Competition
With more first-home buyers joining the market, the entry-level price segment could become highly competitive. That’s where many investors are also active—especially those looking for positively geared properties. The extra demand at this end of the market could drive prices up quickly, particularly for properties under $900,000 in major cities. As detached homes become less affordable, well-located townhouses and low-rise units could see the strongest capital growth as buyers seek alternative entry points.
What the Data Is Telling Us
Super Withdrawals Could Add $100K+ to Prices
Giving first-home buyers access to their super may seem like a helpful policy on the surface, but the data shows it could inflate property prices fast. Economic modelling estimates that allowing $50,000 withdrawals could lift prices by around $69,000 in Sydney, $108,000 in Melbourne and $159,000 in Adelaide. When thousands of buyers enter the market with more cash at the same time, the result is usually higher sale prices—especially in markets already under pressure.
Historical Trends Support Price Growth
We’ve seen this before. When the government introduces new buyer incentives, demand rises sharply—especially if supply can’t keep up. The early 2000s and the post-GFC years followed a similar pattern: stimulus-driven demand, tight housing supply, and population growth led to strong price gains. If interest rates fall after the next election, as some forecasts suggest, these policies could have an even bigger effect. For buyers and investors, timing could be everything.
Who Might Benefit the Most?
Investors Positioned in the Right Suburbs
Investors who already own properties in tightly held, well-connected areas may be well-placed for strong returns. The renewed focus on affordability is expected to increase demand for townhouses and low-rise units, especially in capital cities. These dwellings are often more attainable for first-home buyers and provide reliable rental income for investors. With listings still tight and more buyers expected to enter the market post-election, prices in established suburbs could climb quickly.
First-Home Buyers Acting Early
First-home buyers who move quickly - before new policy changes filter through the system - may be able to secure properties at lower prices. As government-backed schemes expand and access to funds increases, more people are expected to compete for the same limited pool of homes. Getting in ahead of this rush could offer a rare opportunity to ride the wave of growth instead of chasing it.
Conclusion
Whether it’s Labour or the Coalition forming the next government, current housing policies are setting the stage for price growth. Both parties are focused on boosting access to funding for first-home buyers—through shared equity, lower deposits, tax offsets, or super access—but these schemes are unlikely to solve the supply issue anytime soon. Construction delays, labour shortages, and planning constraints continue to hold back new housing. This mismatch between demand and supply is what fuels sharp price increases. For both investors and first-home buyers, the key is not to rush but to plan carefully. Acting on clear data, understanding micro-markets, and thinking long term will matter far more than who wins the next election.
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